Nano Dimension has entered into a non-binding agreement to merge with Infinite Epigenetics, an artificial intelligence-powered preventive health and diagnostics company.
The deal would represent a pivot away from additive manufacturing and into AI health diagnostics for Nano Dimension.
Nano has gradually been divesting many of its additive manufacturing investments, with Desktop Metal filing for bankruptcy, and Fabrica, Markforged, and its Additively Manufactured Electronics business, all being sold off in the last 12 months.
Its proposed merger with Infinite Epigenetics comes after a multi-month strategic review that assessed around 20 companies. Infinite Epigenetics is said to have offered the ‘most compelling path’ to long-term value creation.
A press release distributed by Nano Dimension says that the proposed combination would deploy Nano’s capital base and Nasdaq listing into a ‘high-growth healthcare AI opportunity.’ Existing Nano shareholders are expected to retain meaningful minority ownership in the combined company on a stated value for Nano Dimension’s shares that reflects a 20% premium to Nano Dimension’s estimated net cash at closing.
The transaction value would be worth up to $890 million, according to the two parties. They also say that: “The transaction is intended to provide Nano shareholders with exposure to a significantly larger addressable market, while providing Infinite Epigenetics with the publicly traded company platform and resources to accelerate its mission.”
Under the term sheet, Nanjo proposes to acquire 100% of the equity interests of Infinite Epigenetics, with the combined company operating under the Infinite Epigenetics name and continuing to trade on the Nasdaq Capital Market under the proposed ticker symbol “IEAI.”
The parties expect that the combined company will have over $400 million in cash at closing, which they believe will provide ‘ample runway and financial flexibility’ as Infinite Epigenetics advances toward positive cash flow, without the need for additional capital raises.
Nano believes this structure provides existing shareholders with value recognition for its cash position and listing and enables them to participate in the potential upside of a high-growth healthcare AI opportunity. Additionally, the pre-combination Nano Dimension shareholders would receive a contingent value right entitling them to certain net proceeds, if any, received by a newly formed entity and liquidation trust from the disposition of certain Nano legacy assets following the closing of the combination.
The term sheet provides for a 30-day period of mutual exclusivity, during which Nano Dimension will conduct confirmatory due diligence on Infinite Epigenetics, and the parties will finalise the terms of a definitive merger agreement.
Infinite Epigenetics CEO Matthew Dawson is expected to serve as CEO of the combined company, while the Board of Directors will include representatives from both parties.
David Stehlin, Chief Executive Officer of Nano Dimension, said: “Infinite Epigenetics represented the most attractive opportunity for us to enhance shareholder value. Together with our financial advisor, Houlihan Lokey, we conducted a thorough review of approximately 20 potential opportunities across multiple sectors over many months. The company checked the key boxes we were looking for: a proven technology platform with: revenue-generating operations; a large, growing addressable market; world-class customers and partners; and a strong leadership team, experienced board members, and highly accomplished investors. We believe Infinite Epigenetics has the potential to become a category-defining company at the intersection of healthcare, biological data and AI, and that the proposed business combination would create a clear and compelling path for long-term shareholder value creation.”
Brad Keywell, Co-Founder of Infinite Epigenetics and Original Investor and Board Member of Tempus AI, added: “We believe the most valuable healthcare AI platforms will be built on proprietary biological data, leveraging AI for novel discoveries and insights. Infinite Epigenetics has the opportunity to bring that platform logic to epigenetics, one of the most powerful and dynamic data layers in medicine.”
Murchinson criticism & Nano response
Murchinson, the asset management firm that owns 7.4% of Nano shares, has criticised the proposal, stating that it ‘represents a misallocation of corporate resources that would significantly dilute existing shareholders.
It also disapproved of Nano’s reluctance to take questions from shareholders during a conference call earlier this week. Murchinson has also suggested that the deal turns Nano into a Special Purpose Acquisition Company (SPAC), and that shareholders have not been able to redeem their shares for cash as Nano makes this transition.
The full Murchinson statement can be found here.
Nano’s retort centres around Infinite Epigenetics being a ‘real business with proven science in a well-established market’, its ‘clear rationale and capital plan’, and a rigorous review and diligence process that is now underway.
In regards to the SPAC claim, Nano says that ‘this is not a situation where the amount of cash at closing is unclear’ and the ‘company remains an operating platform with existing assets, and capital, and strategic direction.’
